According to Pakistan's Economic Survey, the government intends to enter the Chinese capital market by issuing Panda bonds.

The Pakistani government intends to diversify its foreign capital market instrument base by issuing a variety of bonds under its Environmental, Social, and Governance (ESG) Framework and also wants to enter the Chinese capital market by issuing Panda Bonds.

The government intends to take on additional debt, but debt servicing costs have been rising at an alarming rate.

During the first nine months of the current fiscal year FY22, interest servicing was Rs 2,118 billion, compared to an annual projected projection of Rs 3,060 billion. Domestic interest payments were Rs 1,897 billion, accounting for about 90% of overall interest servicing, owing to the higher proportion of domestic debt in the entire public debt portfolio.

Domestic debt stood at Rs 28.076 trillion at the end of March 2022, up to Rs 1.811 trillion from the previous fiscal year's first nine months.

Debt from multilateral and bilateral sources accounted for about 79 per cent of the external public debt portfolio at the end of March.

The revaluation benefit resulting from the greenback's strengthening versus other foreign currencies reduced the external public debt stock by roughly $1.6 billion in US dollars.

Source: DAWN

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